Addleshaw Goddard has replaced Freshfields Bruckhaus Deringer in advising Royal Bank of Scotland (RBS) as it bids to retrieve capital owed to it by former partners of now-defunct firm Halliwells.

Addleshaws finance litigation partner Ian Hastings is acting for RBS, which is attempting to claw back money lent to ex-Halliwells partners through professional practice loans (PPLs).

The firm has taken over from Freshfields on the mandate, with Freshfields continuing its wider role advising RBS as a main creditor on Halliwells' collapse.

The bank lent the money to partners to fund capital contributions due either when entering the equity or when called on for additional capital. Halliwells was then unable to pay back the loans, which are usually repaid by a law firm when a partner leaves.

The firm's inability to pay left 40 equity partners and a number of fixed-share partners owing around £12m in PPLs to banks including RBS, Handelsbanken and The Co-op. Despite some of the firms now housing former Halliwells partners pledging to help them repay these loans, some ex-partners at other firms have not received assistance and have been left liable for loans of up to six-figure sums.

The news comes as it emerges that a number of former Halliwells partners now at HBJ Gateley Wareing have reached a settlement over the firm's £4m rent liabilities. The partners have settled with Paul Thomas and agreed to share liability for part of the rent guaranteed on Halliwells' former Manchester offices at St James's Court until 2013.

Other ex-partners now at firms including Barlow Lyde & Gilbert and Hill Dickinson have yet to settle and are expected to start arbitration proceedings with Thomas later this year.

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